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    Posted on Aug 8, 2013

    Are Album Deals On Groupon A Bad Omen For Artists?

    Despite what you may think, it's not necessarily a sign of desperation.

    Twitter was having a laugh last week when news surfaced that Ciara's latest album was on sale for $13.99 in a two-CD bundle.

    Epic Records

    Her new self-titled album dropped only three weeks ago but is already on the deal site, being sold in a package with a "best of" album of her other hits.

    It may be odd to see a new album being packaged and dished out in a deal like this so close to its initial release. In Ciara's case, people are speculating that it's an attempt to get Ciara's numbers up fast. Ciara sold 59,000 in its first week, according to Nielsen SoundScan, and 90,000 copies total thus far — which is a totally respectable number for an R&B album! But the singer was being met with pity and embarrassment on social media because of the seemingly desperate attempt to sell more albums.

    But how desperate is it, really?

    "To tell you the truth, even the mighty Jay Z can't sell a million albums in the opening week, either, anymore, which is probably why he bundled his record with an electronic device manufacturer," says Casey Rae, interim executive director of the Future of Music Coalition, a research and advocacy nonprofit for musicians, and an adjunct professor at Georgetown University.

    The Groupon deal is more so a sign of labels trying to adapt and get with the times, and to try new ways of reaching as wide of an audience as possible. Sure, real fans may have already bought the album on iTunes or maybe even bought a physical copy from Target (or, you know, illegally downloaded it), but what about the listener who is kind of on the fence, or lives in an area where there may not be access to high-quality broadband?

    Deal sites like Groupon do an excellent job of persuading its subscribers to buy packages that they may normally not think to on their own: "Sure, a weekend rafting trip sounds great"; "Oh man, a $25 coupon for $50 at this Italian restaurant I've never been to near me. Why not?" By placing an album package among the random array of other attractive deals, major labels may be able to sell units to people who normally wouldn't feel encouraged to purchase it on their own accord. And by bundling older catalog items with new releases, it's also a way for labels to clear out back stock.

    "If they move some at a loss, it's not going to be a problem as long as they've enticed people to buy something that maybe isn't as exciting in this marketplace, which is a physical item," says Rae.

    And if it so happens to boost total sales, that's another perk. SoundScan has not yet commented on whether sales of albums on Groupon count toward the album's total SoundScan sales, but Groupon says that it's up to the labels to report what's categorized as "non-traditional" sales. They send a verification of the sales by zip code to the labels, who'll then report it SoundScan. But even if they decide to include it in the count, SoundScan tells BuzzFeed that it would be very hard for the amount sold on Groupon to really make a dent on its overall sales numbers.

    These deals are also set up much further in advance than many may realize, says a source who used to work at Groupon and wishes to remain anonymous. "Groupon has a really long lead time; they can't just run a business because someone called them that morning," the source says. "So usually, artists look at Groupon as part of a 360 marketing campaign, where they're looking at advertising online, and they'll probably do some print and radio. It's not really any different than mapping out all the other vehicles you would use in a marketing campaign."

    "Whether it reeks of desperation or not really depends on marketing and perception," Rae says. But he adds that because we live in the hyper-aware internet age where news and rumors spread like wildfire, you really only have a limited opportunity to manage that perception. It takes just one person to make a snarky joke on Twitter before the rest of the internet is laughing along with them into the echo chamber.

    In actuality, it's not so much a last-resort move as it is a planned marketing strategy. "A lot of those deals are done before anything hits the site," says the Groupon source. "So, it's not like [Ciara's] album was failing and she picked up the phone and called Groupon and said, 'I have to sell X amount of albums.' This was probably in her marketing plan six months ago."

    "Bundling in general is something that a lot of folks are experimenting with," says Rae. "I think at this point the major labels and the folks who are in charge of the superstar careers are trying the 'throw everything at the wall and see what sticks' approach, particularly if you're talking about physical items."

    It's been common for independent artists to create their own bundles to incentivize fans to buy their albums: special behind-the-scenes booklets or DVDs, merch, posters, etc. But for a major label to dip into bundling on deal sites like Groupon is a sign that the industry as a whole and buying habits of consumers have, obviously, changed.

    And it's not just artists supposedly struggling to move records who are putting their music for sale on Groupon; plenty of superstar acts have gotten in on the deal too. Justin Timberlake had his new album up on Groupon fairly close to its release, and that was part of a three-album bundle.

    You could also find deals like this one from last December: $16 vinyl records of artists like Jay Z, Prince, and Nirvana.

    "It's our goal to connect customers with outstanding entertainment options at a great price," Tim DeClaire, head of consumer PR for Groupon, tells BuzzFeed.

    "Groupon works with a number of top recording artists, record labels, entertainment companies, and distributors to sell a wide variety of CDs and DVDs, in addition to deals on concert tickets," DeClaire says.

    The first album Groupon offered for sale was Carrie Underwood's Blown Away in May 2012.

    "Since then, [Groupon] has offered deals on CDs and box sets from such artists as Justin Timberlake, The Rolling Stones, Foo Fighters, Pearl Jam, Jay Z, The Black Keys, Blake Shelton, and Katy Perry, among many others," says DeClaire.

    Groupon also offers "EPIC" trips, like this one that includes airfare to Vegas to meet and see Rod Stewart in concert.

    And concert deals for artists like John Mayer, Maroon 5, Tim McGraw's Superstar Summer Night with Taylor Swift, Luke Bryan, Lady Antebellum, Pitbull, and Heart.

    This certainly isn't the first time artists have offered bundles, but it's mostly been popular in the independent music community, where novelty items help encourage and breed a sense of loyalty and community.

    You'll see acts like Odd Future often do this, as Tyler, the Creator recently did by packaging various bundles for his album Wolf. Fans were able to buy bundle ticket packages for the Wolf tour, which included a deluxe edition of the album, a booklet featuring lyrics and artwork, a calendar, a poster, and a limited-edition embroidered patch.

    Knowing that the money will come from tour tickets and merch and novelty items rather than straight album sales is smart for these kinds of artists, but it might not work for everyone. "Not all musicians are young, bizarro hip-hop kids, or indie rock kids that can get in the van," says Rae. "A tenor saxophone player who's devoted countless hours to mastering his or her craft might not be the most engaging Twitter personality."

    "A lot of this is just experimentation. It's folks trying to get fans to respond to something in a very, very crowded marketplace. In order to do that, you take advantage of tried-and-true sales techniques, and sometimes it's a 'limited-time offer.' That's a huge motivator — it clicks a psychological thing in our consumer-loser brain: 'Act now!'"

    So, who approaches whom in setting up these deals? Are major labels reaching out to deal sites or is Groupon going after the artists?

    Lionel Cironneau, File / AP

    "Honestly, it's a mix of both," DeClaire says.

    "I think it's in their best interest to attract hot celebrities; like, they don't want to be a dumping ground for D-list celebrities," says the Groupon source. "And at the same time, a lot of A-list talent actually approach Groupon and, like I said, are planning it into their advertising. A good example would be Rihanna. Rihanna launched her album — one or two albums ago — on Groupon."

    But the question is whether these kinds of deals are packaged in a way that really make sense.

    "It's interesting that the big labels would try to package physical items for superstar acts," says Rae, "but who are they aiming that at? Everybody in the world? Basically everybody who signed up for Groupon?"

    It's true that the beauty of deal sites with limited-time offers is that it clicks something psychological in our brains that says we must get a good deal before it's gone; why wouldn't major labels get in on creating incentives for people to buy? But, Rae says, the key in actually selling these bundles is creating interesting packages that appeal to both the casual consumer and the super-fan.

    "For a hardcore Justin Timberlake fan to be motivated to buy the new album because you packaged a couple of older albums with it...I don't know if that's a winning strategy, because the super-fan probably has those albums, and the average person who's inclined to get a Justin Timberlake album on CD," he says, "I don't know if they wouldn't have already just downloaded it on iTunes or somewhere else."

    Take this Backstreet Boys deal that's currently on the site, for example. For $29.99, buyers will receive the band's new album, along with five of their older albums. It's curious to think about who exactly would buy a six-album bundle of BSB hits; most fans of the band probably bought at least one or two of their albums back in junior high.

    How successful are these deals, anyway?

    Kevork Djansezian / Getty Images

    A lot of people on the internet were giving Ciara flack for having only sold 140 albums, but that number is actually really deceiving. Groupon doesn't publish the total amount sold, so the number you see on your screen is the amount for your city's page and is not a complete number. The company changed its policy in 2011, after realizing that people were using the information to extrapolate business performance and guess the company's revenue.

    "People would say, 'Oh, well I looked today and it only sold 50, how embarrassing,'" says the Groupon source. "Well, right, it sold 50 in Des Moines or Montana, but it sold 2,000 in L.A."

    So, even if most labels are experimenting with this new model, it's probably important for them to also consider how it may affect their artist's image or reputation, and handle it with the appropriate care. But for many labels, it might not even have been something they considered. "And that's kind of sad because, like, on one level, maybe they don't have to care," says Rae.

    "It's just an item on an accountant's ledger sheet, a line item — but Ciara probably cares if her reputation is somehow compromised through brand mismanagement," Rae continues. "Her manager probably cares. Or maybe they don't; maybe they thought it was a really great idea. It's hard to say. But the thing in this environment is, mass audiences are fickle and public perception can change really, really quickly."